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Climate Legislation; Ag Economy; Dairy Issues; Food Prices; Nutrition Programs; Crop Insurance; Animal Agriculture; and EU Imports
Climate Legislation- Lawmaker’s Perspective
An update posted yesterday at FarmWeek (Illinois Farm Bureau) indicated that, “The iffy proposition of lucrative ag carbon ‘credits’ for farmers is unlikely to square with ‘the certainty of higher input costs’ under current congressional climate proposals, according to U.S. Sen. Mike Johanns (R-Neb.), former ag secretary and an outspoken critic of House cap-and-trade proposals.
“After health care, Johanns sees climate debate as the next hot button for Congress this fall: President Obama wants that, and I think it’s going to be one of the next issue queued up, But the feeling in farm country is quite different — he argues Nebraska farmers are ‘enormously skeptical, if not downright opposed’ to proposed greenhouse emissions caps projected to impact future electrical, fuel, and input costs.
“‘You’ll pay more for fertilizer and diesel fuel and electricity to run your irrigation pump,’ Johanns warned during an RFD Radio/FarmWeek interview Monday. ‘On the other side, I think the benefits are very, very uncertain. I think this idea that farmers are going to make money by trading credits is very uncertain promise.
“‘If I were a farmer out there, I’d want the certainty of what I’m doing now, and even at that, that can be very uncertain. Add cap-and-trade to it and what you add is higher input costs with no promise of what comes out on the other end.’”
Also yesterday, Iowa GOP Senator Chuck Grassley held a tele-news conference with agricultural reporters (transcript available here) and proposed climate legislation was a topic that was part of the conversation.
Julie Harker reported yesterday at Brownfield that, “Senator Chuck Grassley of Iowa says he’s not going to reject everything Ag Secretary Vilsack says about benefits for agriculture through cap and trade. Grassley says some studies show some benefits – but he has a great deal of doubt about cap and trade being ‘fair to American agriculture. And the main reason for that is not giving us enough credit going back 20 years for what we have done already through minimum tillage or no tillage to cut down on energy use and putting CO2 into the air.’ Grassley says the economic analyses he’s studied suggest such a carbon trading system would be most beneficial to forestry and less so for row crop farmers.”
In his tele-conference with reporters yesterday, Sen. Grassley also stated that, “Well, I think cap-and-trade is pushed back anyway because it’s probably more sweeping in its impact on the economy than even what we’re talking about, health care. But I don’t think, particularly, our committee’s got time to do both [climate change and health care reform]. And our committee isn’t the only one involved in cap-and-trade because the Energy and Environment Committees haven’t put out anything yet at this point.
“So I don’t think we’ll act until they act. But it’s become somewhat controversial, as well. Well, I would say the House bill is very, very controversial. And I can tell you, right now, I wouldn’t vote for the House bill. But the — I got to wait and comment on the Senate bill after the committee in the Senate puts a bill out.”
In a separate transaction in yesterday’s briefing with reporters, DTN’s Chris Clayton asked Sen. Grassely the following question: “Senator, I was wondering, back on the cap-and-trade and climate legislation, the U.S. Chamber of Commerce wants to kind of essentially have a trial with the EPA debating the science of climate change. And I was wondering, are you convinced greenhouse gas emissions cause climate change and are a threat to human health?
“GRASSLEY: Well, I’d be foolish if I didn’t give — I’d be foolish if I didn’t give it some consideration because there’s a massive amount of scientists that feel that it does. But there’s also an increasing number of scientists that have doubt about it.
“And so, not being a scientist, I don’t know exactly where to say only those things that are really quantifiable, and temperature has risen. But the scientific aspect that I still reserving judgment on is the extent to which it’s manmade or natural.”
With respect to the Chamber of Commerce legal action, the Los Angeles Times editorial board indicated today that, “The U.S. Chamber of Commerce, seeking to make monkeys of the legions of scientists who have suggested that climate change is a significant problem, wants to put them on trial. Specifically, it wants the Environmental Protection Agency to stage a ‘Scopes monkey trial’ for the 21st century, appointing a judge to hear evidence on the question of whether global warming endangers Americans’ health.
“It’s an intriguing idea. Congress is considering legislation aimed at fighting climate change that would force the country to reinvent its entire energy infrastructure. Separately, the EPA is weighing an ‘endangerment finding‘ that would authorize the agency to regulate greenhouse gas emissions. Thus the federal government may be embarking on a very expensive course — all to head off a threat that many Americans don’t understand or don’t believe to be a threat at all. Wouldn’t it be great if we could just stage a big trial, weigh the evidence and decide whether any of this makes sense? Maybe we could even get Judge Judy to preside.
“Yet the trouble with the chamber’s petition, which it filed Tuesday with the EPA, is that it has little basis in precedent or law. It’s true that the EPA sometimes holds hearings before administrative law judges when the legality of its regulations is challenged, but the chamber wants it to hold such a hearing before any regulation has been approved, and the judge to rule not on a law but on the scientific basis for making a law. This has a whiff of a political stunt designed to fail — and when it does, to give the chamber a pretext for accusing the Obama administration of not giving a fair hearing to scientific arguments that challenge mainstream climate-change theory.”
Meanwhile, the AP reported yesterday that, “Sen. Mark Begich [D-Alaska] says he’ll host four other senators on a ‘climate change’ tour this weekend in Alaska.
“The senators will see retreating glaciers, forests damaged by invasive species, and drying wetlands. They’ll also visit the North Slope to see the Prudhoe Bay oilfield.
“The senators are Barbara Boxer of California, Bernie Sanders of Vermont, Frank Lautenberg of New Jersey and Debbie Stabenow of Michigan. Three of the senators are members of the Senate Committee on Environment and Public Works, and Boxer is the chair.”
And Ben Smith reported yesterday at Politico.com that, “Four independent groups are launching more than $1 million in attack ads Tuesday targeting five House Republicans who voted against energy legislation in June, spokespeople for the groups said.
“The ads from the League of Conservation Voters, the Sierra Club, MoveOn and Americans United for Change, will target Reps. Thaddeus McCotter (R-Mich.), Denny Rehberg (R- Mont.), Roy Blunt (R- Mo.) and two Virginia Republicans, Frank Wolf and House Minority Whip Eric Cantor.
“The ad casts the members as siding with ‘big oil and energy interests’ and against ‘the jobs we really need’ because they voted against the legislation that would set up a system of trading carbon permits known as ‘cap-and-trade’ and impose a series of other measures aimed at reducing emissions.”
On the issue of oil and climate change legislation, Reuters news reported on Monday that, “U.S. oil refiners could cut output by as much as 25 percent and the nation’s reliance on imported refined products could double in the next two decades if the House version of a climate bill becomes law, the American Petroleum Institute said on Monday.
“Under the so-called cap-and-trade bill narrowly passed by the House of Representatives in June, refining output could plunge by as much as 4.4 million barrels per day by 2030 to 12 million bpd, the API said, quoting a study it commissioned by EnSys Energy.”
Climate Change- International Perspective
Bloomberg news reported yesterday that, “India and China are pushing for an agreement at this year’s climate change talks in Copenhagen and shouldn’t be viewed as a ‘negative or obstructionist force,’ said India’s Environment Minister Jairam Ramesh.
“‘Both of us were of the view that we should be part of the solution,’ Ramesh said in an interview today in Beijing, where he met with Xie Zhenhua, China’s top climate-change negotiator. ‘We want an agreement in Copenhagen.’
“China and India, the world’s two fastest-growing major economies, are key to a successful outcome for the Copenhagen conference in December, where an expected 192 nations will meet to replace the Kyoto Protocol. The existing accord, which sets emission targets for developed nations, expires in 2012.”
Stephen Power reported yesterday at the Washington Wire Blog (The Wall Street Journal) that, “Washington might be preoccupied with health care and CIA interrogation techniques, but Europe is still counting on Congress and the Obama administration to help forge a global climate change treaty by year’s end.
“Andreas Carlgren, Sweden’s environmental minister, told Washington Wire that Congress’s approval of climate legislation is ‘essential’ to pinning down a world-wide agreement to combat climate change at talks this December in Copenhagen. Carlgren was in Washington bringing that message to U.S. officials.
“‘You shouldn’t underestimate the expectations [President Barack Obama] has created in the world,’ Carlgren said. ‘He’s created huge expectations. That is also something to take into account as we move toward Copenhagen … We expect a comprehensive agreement.’ The meeting is sponsored by the United Nations.”
However, Keith Johnson noted yesterday at the Environmental Capital Blog (The Wall Street Journal) that, “[A]s Michael Levi argued in the latest issue of Foreign Policy (sub reqd.), the chances of success in Copenhagen look ‘vanishingly small.’ A better approach, he says, would be to treat climate talks like trade talks—an ongoing round of negotiations that may last for years but which can address all the minutiae, such as figuring out who’s emitting how much of what in the first place. And which, by the way, have some sort of enforcement for countries that ditch their obligations.”
Ag Economy
An update posted recently at the Federal Reserve Bank of Minnesota Online indicated that, “After a weak first quarter, the outlook for agriculture is not much better after the second quarter. The Minneapolis Fed’s second-quarter (July) agricultural credit conditions survey showed that farm income, household spending and capital expenditures all decreased significantly in the second quarter. Loan demand increased slightly, as did collateral requirements. Few banks reported fund shortages, and interest rates stayed nearly constant from the first quarter. Farmland values and cash rents were stable to slightly lower. Although the second quarter may not have been as severe as the first, almost half of respondents expect lower net income and less capital spending in the third quarter.”
The update added that, “In the second quarter, farm income decreased, with 41 percent of respondents reporting lower income. Some sectors have it tougher than others, however; one respondent noted, ‘Livestock sector (mainly hogs and dairy) performed badly in 2008, and this sector appears to be in worse shape in 2009.’”
Dairy Issues
With respect to the dairy sector, a news release issued yesterday by the USDA stated that, “Agriculture Secretary Tom Vilsack today announced that as part of USDA’s continuing efforts to listen to and respond to the needs of producers in the dairy industry he is moving forward on establishing the Dairy Industry Advisory Committee and is requesting nominations.
“‘The Obama Administration is committed to working with all sectors of the dairy industry to develop changes to the dairy pricing system to avoid the boom and bust cycle behind the crisis facing many dairy farmers this year,’ said Vilsack. ‘The input provided by the members of this committee will play an important role in building a more stable market for dairy producers for years to come.’”
In a related item, The New York Times editorial board opined in today’s paper that, “Milk looks simple enough coming out of the carton. But behind the scenes is a complex system of federal contracts and programs that is now doing a terrible job for dairy farmers in New York and New England.
“In the past year, the price farmers get paid has dropped some 40 percent, to about $1 a gallon, which can be as much as 40 cents a gallon less than it costs to produce milk. Prices have dropped for consumers too, to a little over $3 for a gallon.”
The Times opinion item stated that, “We do not like agricultural subsidies or price supports, and we have opposed dairy subsidy programs. They tend to push farmers in the wrong directions, and they blunt the impact of market forces on farms. But there is a special argument to be made in this case.
“Nearly 2.5 million acres in New York state are directly tied to dairy farming. The milk crisis is severe enough to put many farms at risk, raising the potential of abandoned farmland susceptible to development.
“In the Northeast, with farms different from the huge factory dairies found in much of the West, the cost of milk is a land-use question. Farmers here still run relatively small herds, and they raise their own feed crops. This kind of dairy is a relatively benign use of the land, a means of protecting open space, a form of stewardship that is more acceptable than most others. We think it is right to keep the state’s dairy farmers on their farms, even if we are not happy with this way of going about it.”
Food Prices
William Neuman reported in today’s New York Times that, “Prices for beef, milk, eggs and some other grocery items have been dropping for several months, providing relief for consumers who suffered through the steep increases of a year ago. But prices are likely to start edging upward again as the economy recovers, according to a new federal report and economic analysts.
“‘The impact from lower energy prices on grocery store prices has largely been played out, and so we’re now looking at grocery store prices to rise modestly through the end of the year,’ said Mark Vitner, a managing director and senior economist at Wells Fargo.”
The Times article added that, “The government report, by the Economic Research Service of the Department of Agriculture, said that grocery prices decreased 0.5 percent in July, compared with June. Compared with July 2008, when overall food costs were surging, grocery prices in July were down 0.9 percent.
“In several food categories, prices dropped sharply. Beef fell 2.3 percent in July, compared with June, the eighth decrease in the last nine months, according to the report. Egg prices were down 2.7 percent from June to July and were 21.3 percent below their level in July a year ago. Milk prices declined 0.4 percent in the month, the 10th decline in the last 11 months, and were 18.4 percent below July 2008.
“The national average price for a gallon of fresh whole milk in July was $2.99, compared with $3.96 in the same month a year earlier, a 25 percent drop, according to federal data.”
Nutrition Programs
Mary MacVean reported in today’s Los Angeles Times that, “When Michelle Obama and her fifth-grade partners harvested lettuce and peas in the White House garden this spring, she made a point of saying that American children are ‘not eating right and not moving their bodies at all,’ and she cited what they eat in school as part of the problem.
“On just about every schoolyard, the nation’s obesity problem is apparent: A fifth of U.S. children are overweight or obese, according to the Centers for Disease Control and Prevention.”
Today’s article noted that, “Nutrition advocates said the first lady’s comments gave them increased hope that Congress would bolster the school lunch program when it takes up renewing the Child Nutrition Act, which expires Sept. 30.
“‘For more and more students in this economy, the meals they receive at school are their nutritional safety net,’ said U.S. Rep. George Miller (D-Martinez), who chairs the Education and Labor Committee, which has jurisdiction over the legislation.
“One portion of the bill would give the Department of Agriculture authority to update decades-old standards for the food children buy at school stores and vending machines, as well as foods such as pizza and French fries that are sold a la carte in cafeterias.”
Crop Insurance
A news release issued on Monday by the USDA stated that, “USDA’s Risk Management Agency Administrator Bill Murphy will participate in two crop insurance listening sessions in Georgia on Thursday, Aug. 27. The listening sessions will give local producers the opportunity to ask questions about the Federal Crop Insurance program and how the program can benefit Georgia producers.”
Meanwhile, Frank Schnapp, Keith Collins, Mike Sieben, and Thomas P. Zacharias authored a recent article published in Crop Insurance Today entitled, “2008-A Year in Review.”
In part, the article noted that, “Despite the challenges of intense hailstorms, spring flooding and wild price swings, the crop insurance industry was able to effectively deliver promised benefits to farmers on a timely basis. Equally important, these benefits were delivered without the need for Congress to pass further disaster assistance legislation. The Crop-Hail program provided farmers security against the major cause of localized damages that might otherwise fall beneath their deductibles under the Federal program. In addition, the Federal crop insurance program continues to work successfully within its Congressional mandates. Farmer participation is high and the companies providing coverage are financially stable thanks to reserves carried forward from prior years. The program provides farmers with valuable protection against drought, flooding and other widespread disasters. The availability of revenue coverage makes it possible for farmers to protect their financial interests even in years with declining prices. With the success of the program in dealing with the 2008 commodity price collapse, revenue protection will continue to be an essential tool in future years to enable farmers who suffer losses to pay back their production loans and continue in business for another year.”
Animal Agriculture
Yesterday’s AgriTalk Radio Program with Mike Adams featured an update on the Ohio Livestock Care Standards Board- which has been part of the state’s effort to address livestock production issues and the humane treatment of animals.
Mike Adams interviewed Ohio Farm Bureau Executive Vice-President John Fisher, to listen to a portion of their conversation, just click here (MP3-5:33).
EU Imports
Reuters news reported yesterday (article posted at DTN, link requires subscription) that, “The European Union’s tough policy on imports of some genetically modified organisms (GMOs) will cut European purchases of U.S. soybeans and raise imports of Argentine soymeal, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
“EU importers said on Aug. 6 they were voluntarily stopping U.S. soybean imports after U.S. soybean meal shipments in Spain and Germany were blocked as they contained traces of GMO corn banned by the EU.”
Keith Good
